Despite all of the confidentiality agreements and security measures, hedge funds’ performance reports to their investors regularly wind up in the hands of journalists. Only very, very rarely does that fact wind up before a court of law.

But that’s exactly where Elliott Management is taking things. The New York-based hedge fund last week sought an emergency court order to force AR magazine to turn over information about who leaked its June 30 letter to investors. According to Elliott, the publication of the letter would cause “significant harm to Elliott and negatively affect its competitive advantage in the market.”

The hedge fund is not seeking to block AR from publishing the contents of the letter. But Elliott founder Paul Singer has reportedly vowed a witch hunt to find out who turned the letter over to the magazine, and asked the court for permission to investigate AR so that it could take action against the leaker.

It is unclear what potentially harmful or damaging information is in the letter, although we are likely to find out soon: AR is set to publish the letter as soon as next week. But Elliott asked the court to force AR to turn over the information within two days.

According to Elliott, it puts watermarks unique to each recipient in their letters.

When it does, it will not be the first time this year that AR has published information from an Elliott letter—the magazine reported earlier this month that the hedge fund was up 5.3% in the first half. But no previous disclosure of its monthly letter has sent Elliott to the courts.

The New York state court set a Sept. 9 hearing on Elliott’s emergency motion. According to experts, its prospects for success aren’t great: New York has a strong shield law protecting journalists from having to reveal their sources.

From the current issue of

Forecasting markets has always been fraught with danger for analysts and traders alike. MODERN TRADER has dedicated issues detailing the pitfalls of following so-called markets gurus. Too often these market experts are allowed to flaunt their winning forecasts and let their losers fade into the background.